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1、Chapter21.Homehas1200unitsoflaboravailable^Itcanproducetwogoods,applesandbananas*Theunitlaborrequirementinappleproductionis3,whileinbananaproductionitis2.a.Graphouttheproductionpossibilitiesfrontier:appleb.Whatistheopportunitycostofapplesintermsofbananas?aLbForeig
2、n'sPP80160240320400Qapplea.Intheabsenceoftrade,whatwouldthepriceofapplesintermsofbananasbe?Intheabsenceoftrade,sincelaboristheonlyfactorofproductionandsupplydecisionsaredeterminedbytheattemptsofindividualstomaximizetheirearningsinacompetitiveeconomy,onlywhenPa/Pb=
3、aIa/a,bwillbothgoodsbeproduced.SoPa/Pb=1.52.Homeisasdescribedinproblem1.Thereisnowalsoanothercountry,Foreign,withalaborforceof800.Foreign^unitlaborrequirementinappleproductionis5,whileinbananaproductionitisLa.GraphForeign^productionpossibilitiesfrontier:Qbanana100
4、08006004002000b.Constructtheworldrelativesupplycurve.6.0a/=55.0RS4.02.01.00.00.250.50.751(Qa+Q*a)/(Qb+Q*b)£：aio.=0.5Pa/PbTheWorldRelativeSupplyCurve1.Nowsupposeworldrelativedemandtakesthefollowingform:Demandforapples/demandforbananas=priceofbananas/priceofapples.a
5、.Graphtherelativedemandcurvealongwiththerelativesupplycurve:Da/Db=Pb/Pa•:Whenthemarketachievesitsequilibrium,wehave/•RDisahyperbolay=—xF7^=0-5a.Whatistheequilibriumrelativepriceofapples?TheequilibriumrelativepriceofapplesisdeterminedbytheintersectionoftheRDandRScu
6、rves・1RD:x=—yy=1.5ye[1.5,5]y=5xe[0,0.5)RS：卜二0.5xe(0・5,+]x=0.5•••Pea/Peh=2a.Describethepatternoftrade.VP!P>Pea/Peb>PJPhAInthistwo-countryworld,Homewillspecializeintheappleproduction,exportapplesandimportbananas.Foreignwillspecializeinthebananaproduction,export
7、bananasandimportapples・b.ShowthatbothHomeandForeigngainfromtrade.QbananaForeign'sPPF10002QD8006004002000胪少声InternationaltradeallowsHomeandForeigntoconsumeanywherewithinthecoloredlines,whichlieoutsidethecountries5productionpossibilityfrontiers・Andtheindirectmethod,
8、specializinginproducingonlyoneproductionthentradewithothercountry,isamoreefficientmethodthandirectproduction.Intheabsenceoftrade,Homecouldgainthreebanan
